The purpose of this article is to present the initial results of an impact study on a scholarship program implemented since 1997 in Recife, capital of the State of Pernambuco in Northeast Brazil. The scholarship program is designed to guarantee a minimum income for poor families by providing a monetary stipend that is contingent on school attendance by the family's children in the 7-14-year age bracket, in basic education (8 years of schooling). In addition to reducing poverty in the short term by increasing per capita family income and focusing social expenditures in the most under-served segments of the population, the scholarship program has proven to be an effective tool in combating repetition in school, the main factor in Brazil's high drop-out rates. The program also helps families and schools mobilize to increase schooling levels among children and has a positive impact by reducing the schooling gap.